Sen. Chuck Schumer has called the recent Democratic takeover of Congress the end of the Reagan era.
If we believe a red flag that the Wall Street Journal has run up about a possible Republican capitulation with the new Democratic majority on Social Security reform, our own Republican president might prove Schumer right.
The Wall Street Journal, and other sources, now report that the Bush administration is expressing openness to forget the idea of private ownership as the basis for Social Security reform, and to work with Democrats to "save" Social Security as it is with tax increases and benefit cuts.
Badly needed reform of our wounded and limping Social Security system has been seriously hampered by what I call the politics of cynicism.
These politics are driven by politicians primarily motivated by protecting their own power and interests as opposed to those of their constituents.
What's my proof that Social Security reform is driven by this cynical brand of politics?
No one could possibly argue that Social Security is a good program today. If we did not have it, and any politician tried to propose it and get it passed, he or she would be laughed out of Washington.
Social Security is a unique government program in that every taxpayer can personally evaluate it by asking the simple questions _ What am I paying, What am I getting, and Is it worth it?
The Heritage Foundation's Social Security calculator tells me, for example, that a 25 year old male earning $31,000 can expect, based on the Social Security benefit he'll receive, almost a negative one percent return on the money he puts in over his working life.
If he purchased a diversified portfolio of stocks and bonds over this same period with this same amount of money, this guy could get an annuity five to six times greater than this Social Security benefit. But even a bank CD would produce a monthly payment that could double Social Security.
There are other relevant points that anyone who has been following this debate can recite. With a private account this guy owns his money. Under Social Security, he doesn't even have a legal right to the benefit. Which is material because the government is constantly changing the rules.
Can you imagine getting a letter from your bank or broker saying they are lowering the return on your investment because they can't afford to pay you what they promised?
But, this is what is about to happen, again, with Social Security.
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